Scale of poll defeat shocks Spain's Socialists

Mr Zapatero has already ruled out an early election, saying he has important reforms to enact

Spain's Popular Party (PP) celebrated its historic electoral victory into the early hours of Monday morning.

As the results poured in, a jubilant, well-heeled crowd thronged the street outside the party's headquarters, dancing and cheering.

Two elderly ladies in their nightdresses looked on from a balcony above, waving the national flag.

For Spain's centre-right opposition, this is a moment to savour.

They have beaten the Spanish Socialist Workers' Party (PSOE) in the municipal vote by a record 10% and snatched symbolically important Socialist strongholds like Seville and Castilla-La Mancha.

Keen to capitalise on that, many in the crowd of PP supporters called for Prime Minister Jose Luis Rodriguez Zapatero to resign, which would force an early general election.

Maria Dolores de Cospedal, a victorious PP candidate in Castilla-La Mancha, agreed that it would be very hard for Spain to go on like this for another 10 months.

She believes that the financial markets, as much as local Spaniards, are looking for stability.

The government should reflect on that, she warned.

'Dark night'

Mr Zapatero has already ruled out bringing the vote forward, saying his party would see out the current parliament in order to implement the vital reforms that Spain needs.

For Spain's centre-right opposition Popular Party, this is a moment to savour

But the call to dissolve parliament is likely to become a haunting refrain.

On Monday morning, newspaper headlines were unanimous. "PP crushes PSOE" was one in El Mundo; "The 22 May tsunami drowns the Socialists" was in El Pais.

The defeat of the Socialists was widely predicted, but the scale of the party's loss suggests a possible landslide win for the PP in the general election, which is due next March.

Mr Zapatero has blamed his party's drubbing on the economic crisis Spain plunged into three years ago. Some 4.9 million people are unemployed, many businesses have been forced to close, and the youth jobless rate is a staggering 45%.

Throughout the election campaign the Socialists argued that painful austerity cuts and reforms were vital and that the crisis was not of Spain's making.

Thousands of mainly young Spaniards have set up camp in central Madrid

The party has been punished nonetheless, leaving the PP - with an opaque campaign for change - to reap the rewards.

Writing in the left-leaning El Pais, Juan Cruz called the PSOE a shadow of its former self.

"It was a dark night, which has turned into a tunnel that will be very difficult to get out of," he added.

There was prior warning of the defeat, when an unprecedented wave of protests erupted on Spain's streets.

Thousands of mainly young Spaniards have joined in, many setting up camp in central Madrid, frustrated at a political class they do not feel represents them.

The protesters say they will stay until next Sunday at least, or until someone "reaches out a hand and says they hear us, they are listening, and they will act", as one young camper called Sol explained.

With no jobs to go to, most of the protesters have nowhere else pressing to be.

Separatist success

Also causing a stir following the election is the success of candidates linked to the political wing of the Basque separatist group, Eta.

A pro-independence electoral alliance, Bildu, saw off several legal challenges to run for office in the Basque Country. It won more council seats in the region than anyone else.

Bildu was cleared to run for office by a court after its members expressly rejected the use of violence

The Terrorism Victims Association (AVT) said Eta had won, causing irreversible damage to democracy.

"Bildu are rubbing their hands with glee," complained the right-wing newspaper ABC. "The results are very worrying."

But Bildu was cleared to run for office by the Constitutional Court after its members expressly rejected the use of violence. So other interpretations are more positive.

"These results are the end of Eta. There is no way back," said Inigo Urkullu, leader of the moderate Basque nationalist party, PNV, which won 30% of the regional vote.

"This shows that people have backed exclusively political methods to achieve independence," he added.

Back in Madrid, the Socialists are preparing for a new election process, this time internal.

Mr Zapatero had already said he would not run for a third term in office. The process of choosing his successor will start next weekend.

With a new face at the helm, the Socialists hope to avoid disaster at the general election.